Public-Private Partnership (PPP) Unit or Process for

Infrastructure in the Philippines

Presented by
Group 5
Members
MDevS(II) –1 Ma Lin Nay
Chi Aung
MDevS(II) _9 Mg Kyaw Htet
Khaing
MDevS(II) – 15 Ma Nu Nu
Lwin
MDevS(II) – 20 Ma Tin Tin
Moe
MDevS(II) – 37 Ma Mya Thi
Dar
MDevS(II) – 31 Kyat Thandar
San
 Content
7. A Case Study
1. Profile

8. Technology and Innovation

2. Introduction

3. Infrastructure in the Philippines? 9. Risk Management Strategies

4. Summary of PPP project 10. Policies in Recommendation

5. Success story in PPP 11. Future P rospects

6. Challenges in PPP 12. Conclusion

Country Profile
PUBLIC OF THE PHILIPPINES:
President: Ferdinand Marcos Jr

• Capital: Manila
• Area: 300,000 sq km
• Population: 109,035,300 million
• Languages: Filipino, English, plus
regional languages
• Life expectancy: 70 years (men) 74
years (women)
 INTRODUCTION

•Public-private partnerships
have been introduced as early
as 1990 under the
administration of President,
Former President of the
Philippines, Corazon Aquino
 INTRODUCTION
*Public-Private Partnerships (PPPs) are contractual
arrangements entered into by the government with
the private sector.
*The private sector can build, operate and maintain
public infrastructure facilities and provide services
traditionally delivered by government. PPP offers
monetary and non-monetary advantages for the
public sector.
*The limited funding resources for local infrastructure
or development projects of the public sector thereby
allowing the allocation of public funds for other local
priorities.
*A mechanism to distribute project risks to both public
and private sector.
*Improved efficiency and project implementation
processes in delivering services to the public.
*Most importantly, PPP emphasizes Value for Money
(VfM) – focusing on reduced costs, better risk
allocation, faster implementation, improved services
and possible generation of additional revenue.
What is the
infrastructure like in
the Philippines?

Insufficient infrastructure has been a major

constraint to economic growth
poverty reduction
Though the country has relatively high access
levels to water, sanitation, and electricity,
service levels have failed to keep up with
rapid population growth and urbanization.

The Philippines faces challenges in

infrastructure development, including
congested urban areas and inadequate
transportation networks. The government's
focus on PPP initiatives aims to address
these challenges and drive sustainable
development across
the country.
 What are the benefits of PPP in
the Philippines

•Advantages of PPP
• Encourage private sector capital.
• Makes projects affordable.
• Providing better value for money.
• Risks sharing.
• Government's focus on outputs and
benefits.
• Quality assurance.
• Encourage sector reform.
• Promote innovation.
 Summary of PPP Projects Update as of December 22, 2023
PPP Projects Under Implementation (183) PPP Projects in the Pipeline (109)

Operational (These are projects where proponents are already given authority to operate and Procurement Phase
National Local
maintain the facilities; facilities are already being used by the end-users.)
Solicited (Under Procurement) 4 Solicited (Under Procurement) 1
National Local
Unsolicited (Under Competitive Challenge) 1 Unsolicited (Under Competitive Challenge) 2
Solicited 25 Solicited 11
Unsolicited 72 Unsolicited 26 Total 5 Total 3
Negotiation Phase
Total 97 Total 37
National Local
Under Construction (These are projects with ongoing construction activities.) Solicited - Solicited -
National Local Unsolicited 2 Unsolicited 1
Solicited 9 Solicited - Total 2 Total 1
Unsolicited 3 Unsolicited 8 Approval Phase
National Local
Total 12 Total 8
Solicited 8 Solicited -
Under Pre-construction (These are projects where conditions precedent for construction have Unsolicited 2 Unsolicited -
not yet been fulfilled.) Total 10 Total -
National Local Project Preparation Phase
Solicited 3 Solicited 2 National Local
Solicited (Under Development) 28 Solicited (Under Development) 2
Unsolicited 7 Unsolicited 11
Solicited (Under Conceptualization) 23 Solicited (Under Conceptualization) 4
Total 10 Total 13
Unsolicited (Under Initial Evaluation By IA) 29 Unsolicited (Under Initial Evaluation By IA) 2
Awarded (These are projects in which notice of award (NOA) has been issued to the winning Total 80 Total 8
private proponent.)
National Local Status of Concluded and Terminated PPP Projects (55)
Solicited - Solicited 1 Concluded
Unsolicited 1 Unsolicited 1 National Local
Total 1 Total 2 Solicited 33 Solicited 2
For Verification of Project Status (These are awarded projects awaiting verification by IA on Unsolicited 3 Unsolicited 4
status of the project.) No Available Information on Procurement
1
Mode
National Local Total 37 Total 6
Unsolicited - Unsolicited 2 Terminated
For Verification of Procurement Mode 1 For Verification of Procurement Mode - National Local
Total 1 Total 2 Solicited 3 Solicited 3
Unsolicited 1 Unsolicited 5
Total 4 Total 8
PPP Projects by Sectors

Information Power Water and Airport Roads Rail

Technology (IT) Sanitation

Terminal Education Property Ports Agriculture/Food Tourism

Development Security
 PPP Projects by Sectors

Solid Waste Health Transport Information and Energy

Management Communication
Technology (ICT)

Contractual Scheme BGTOM - Build-Gradual Transfer-Operate-Maintain

BOT - Build-Operate-Transfer DBTO - Design-Build-Transfer-Operate
CA - Concession Agreement ROT - Rehabilitate-Operate-Transfer
BTO - Build-Transfer-Operate ROMM - Rehabilitate-Operate-Maintain-Manage
CAOT - Contract-Add-Operate-Transfer MOA - Memorandum of Agreement
BOO - Build-Own-Operate BTOM - Build- Transfer-Operate-Maintain
TOA - Toll Operation Agreement BTOMM - Build- Transfer-Operate-Maintain-Manage
BLT - Build-Lease-Transfer O&M - Operations and Maintenance
STOA - Supplemental Toll Operation Agreement OAT - Operate-Add-Transfer
BT - Build-Transfer RSOM - Rehabilitate-Supply-Operate-Maintain
TBD - To be determined ROET - Rehabilitate-Operate-Expand-Transfer
JV - Joint Venture ROL - Rehabilitate-Operate-Lease
BROT - Build-Rehabilitate-Operate-Transfer ROM - Rehabilitate-Operate-Maintain
PPP Projects by Estimated Project Cost
Estimated Project Cost
Sr. no Project Name Sector Status
During Approval
Under initial
1 MRT 7 Katipunan Spur Line Project Transportation, Rail Php 107.00 Billion
evaluation by IA
Under initial
2 C5 MRT 10 Project Transportation, Rail Php 112.26 Billion
evaluation by IA
Under initial
3 MRT 7 Airport Access - North Line Project Transportation, Rail Php 130.90 Billion
evaluation by IA
USD 3.00 Billion
4 MWSS Privatization (East) Water and Sanitation Operational
Php 150 Billion
Ninoy Aquino International Airport (NAIA) Transportation,
5 Under-procurement Php 170.59 Billion
PPP Project Airport
USD 4.00 Billion
6 MWSS Privatization (West) Water and Sanitation Operational
Php 200 Billion
Sangley Point International Airport (SPIA) Transportation,
7 Pre-construction Php 215.69 Billion
Project Airport
Municipality of Malay Ecological Solid Solid Waste
8 Operational Php 247.68 Billion
Waste Management Project Management
New Manila International Airport (Bulacan Transportation, Ongoing
9 Php 735.63 Billion
International Airport) Airport Pre-construction
Joint Venture Proposal for the Laguna Lake
10 Property Development Approval Phase Php 763.54 Billion
Rehabilitation and Development Project
 Success Stories in PPP

• The water concession project in Metro

Manila in 1997 was the largest in the
“A Key Government world at the time.
Officials Diary of the • Recognizing internationally as a
World’s Largest successful case of PPP for the
Water Privatization” improvement of water distribution
coverage and quality of water
services.
 The Manila Water
•
Concession
The Metropolitan Waterworks and Sewerage System was mandated to enter
into PPP arrangements under Republic Act No. 8041 (National Water Crisis
Act of 1995).
• It entered into two concessions for water, wastewater and sanitation services,
one for East Zone (Manila Water) and one for West Zone (Maynilad).
• Each concession was for 25 years.
• Tariffs were fixed until 2003 and the concessionaires were to pay a concession
fee to MWSS.
• Unfortunately, coupled with the Asian financial crisis which caused foreign
exchange issues, resulted in both concessions facing financial difficulties and
MWSS regulatory office agreed to tariff increases.
• Manila Water was then able to meet its commitments and has had its
concession extended for a further 15 years.
• Maynilad filed for bankruptcy in 2003 and the services were handed back to
MWSS in 2005.
 The Manila Water Concession (Cont’d)
• Water services delivered by MWSS was facing serious problems before the
concession.
• MWSS was only able to supply water to about two-thirds of population in
the coverage for an average of about 16 hours per day.

Achievement of the Project

 Issues and Challenges on the PPP framework and
implementation in the Philippines
Investor confusion in PPP Limited flexibility in Inconsistent policy on
frameworks approval thresholds unsolicited proposals

Weak technical capacity

Limited competition in Ensuring sanctity of PPP
for PPP project
unsolicited proposals contracts
preparation
Challenges in foreign
Addressing Right-of-Way Broadening the spectrum
participation in PPP
(ROW) delays of PPP financing
projects

Strengthening safeguards Promoting transparency

Mitigating risks arising
in PPP schemes for and accountability
from contingent liabilities
ICT projects through legal provisions
Mandaluyong City Public
Background
Market Public–Private
Partnership Project: • The previous Mandaluyong Public Market was razed
A Case Study by a fire accident in 1990.

• The vendors who had carried out business in this

market were transferred to street sidewalks

• The occupation of the sidewalks by the vendors

inconvenienced the general public who were using the
sidewalks for their commute.

• The City Government decided to develop the public

market to provide the vendors a place to carry out
their business and free the sidewalks for the
commuters.
Description of the Public–Private
Partnership
In 1991, the Mandaluyong City Government (the local
government) entered into a PPP contract agreement to
develop the marketplace.

The project was awarded through a solicited proposal mode.

The winning bid for the ₱300 million ($6 million as of April
2020) project came from the Macro Founders and Developers,
Inc. (MFD), a business consortium formed for this project.

The private developer constructed the public market on the

ground floor of the commercial center and transferred control
to the Mandaluyong City government immediately following
completion.
Description of the
Public–Private
Partnership
• Half of the stalls in the public market were constructed by the city
government and the other half were constructed by the stall owners,
per the agreement between the city and the Association of Stall
Owners.

• The government was designated as the operator of the public market

and engaged in the collection of stall fees.

• Maintenance and security for the public market were outsourced to

the MFD.59 The remainder of The Marketplace, the commercial
complex, fell under the BOT scheme.

• The Mandaluyong City government offered a 40-year concession to

the MFD for the operation and maintenance of this portion of the
complex.

• Though the government retained ownership of the land used in the

project, it did not require lease payments from the MFD for its use.
Description of the Public–
Private Partnership

• The government does not have a share in any of the revenue generated
by the commercial complex, and that revenue is used by the MFD to
recoup the capital and operating costs.

• At the end of 40 years, the MFD will transfer the operation and
maintenance of the commercial complex to the Mandaluyong City
government.

• Project finance

• The original project cost estimate was ₱300 million ($6 million as of
April 2020), and the project financing is given below.

• 50% of the project cost was financed by debt and the remaining was
financed by equity contribution from the MFD and advances from
shops and charitable institutions.
Description of the Public–Private
Partnership

• The equity contribution from the MFD was 25% of the project cost, and 25%
of the project cost came from advances paid by shops and charitable
contributions60

• 50% of the project cost was financed by debt. The Asian Financing and
Investment Corporation, a subsidiary of the Asian Development Bank,
provided a 10-year loan at concessional rates for the project.

• The final project cost was ₱450 million ($9 million as of April 2020).

• As the project had high commercial potential, the MFD took on all the
construction risk and absorbed this increase by making incremental equity
infusion .
Key learnings

• Well-planned PPP projects can help local governments deliver the

necessary infrastructure services to the public.

• Stakeholder engagement and involvement is a major driver for the

project success.

• The project received commitment from the local communities and the
Mandaluyong City Government.

• Transparent procurement of this project ensured selection of the most

qualified bidder at amicable terms for both the public and private sector.

• Mixed-use land development has helped the Mandaluyong City

Government develop this project without any capital outlay.

• Moreover, the Mandaluyong City Government benefits from incremental

revenues from collecting taxes from the businesses in the marketplace
Technology and Innovation

Embracing technology and innovation is essential

for driving infrastructure development. From
smart transportation systems to sustainable
energy solutions, leveraging cutting- edge
technologies can enhance the efficiency and
sustainability of infrastructure projects-
- Digital Platforms and Project Management
- Data Analytics and Decision Support System
- Smart Infrastructure
- Blockchain Technology
- 3D printing and prefabrication
- Renewable Energy Integration
- Digital Payments and Financing
 * Risk Management Strategies
Implementing robust risk management strategies is
crucial for mitigating potential challenges in
infrastructure projects. From financial risks to
construction delays, proactive risk management can
safeguard the successful delivery of infrastructure
initiatives.
That specific strategies may vary depending on the
nature of the infrastructure project and the
technologies involved.
For the most up-to-date information on the technology
risk management strategies employed by the PPP Unit
in the Philippines
 * Policy Recommendations
 PPP projects are crucial for infrastructure and
public service development in the Philippines.
 PPP model involves collaboration between
government and private sectors for infrastructure
and service provision.
 PPPs in the Philippines address infrastructure gaps
and stimulate economic growth.
 Enactment of Republic Act No. 6957 (BOT Law)
initiated momentum for PPP implementation.
 Successful PPP initiatives in transportation, water
supply, energy, and healthcare exist.
 * Policy Recommendations
 Challenges faced by the PPP framework include
lengthy approval processes and delays.
 Issues with legal frameworks, regulatory
constraints, and political risks hinder PPP
projects.
 Policy recommendations include streamlining
approval processes for faster decisions.
 Strengthening legal frameworks to enhance
investor confidence is crucial.
 Engaging stakeholders and ensuring
transparency promotes accountability in PPP
initiatives.
 * Future Prospects
 Government commitment to infrastructure development
fosters a conducive environment for PPPs.
 Emerging technologies and innovative financing
mechanisms offer new opportunities for PPPs.
 Sustainable development goals drive PPPs to address
evolving infrastructure needs for inclusive growth.
 Government's "Build, Build, Build" program demonstrates
commitment to infrastructure development.
 Successful PPP projects attract domestic and international
investors.
 Improved regulatory environment enhances investor
confidence in PPPs.
 Technology integration like IoT and AI enriches efficiency
and resilience in infrastructure.
 * Future Prospects
 PPPs align with Sustainable Development Goals for
inclusive development.
 Emerging financing models like green bonds attract
diverse investors.
 Investments in transportation enhance regional
connectivity and economic growth.
 Adaptable infrastructure post-COVID-19 focuses on
healthcare and digital connectivity.
 Challenges in regulatory frameworks and risk-
sharing need addressing for PPP potential.
 Proactive policy reforms create a promising future
for PPPs in the Philippines.
 C onclusion
 PPPs drive infrastructure development and economic progress in the Philippines.
 Policy recommendations focus on streamlining, enhancing frameworks, and capacity building.
 Continued commitment and strategic planning are crucial for PPP success.
 Prospects for PPP development in the Philippines promise transformative growth.
 Collaborative efforts address the infrastructure deficit in the country.
 Despite challenges, successful strides have been made in implementing PPP projects.
 Sustained government commitment and investor confidence are pivotal factors.
 Leveraging technology and aligning with sustainable goals enrich PPP prospects.
 Addressing challenges like regulatory enhancements is vital for PPP potential.
 PPPs contribute to sustainable development, economic growth, and improved citizen life
quality in the Philippines.
 References

• https://ppp.gov.ph/list-of-projects/
• https://www.jstage.jst.go.jp/article/jamsjsaam/27/0/27_3/_pdf
• https://legacy.senate.gov.ph/publications/SEPO/
SEPO%20Policy%20Brief_PPP_27Sept2023(1).pdf
• https://www.unescap.org/sites/default/files/Case%202%20-%20Efficiency%20Gai
ns%20-%20Manila%20Water.pdf
• https://openknowledge.worldbank.org/entities/publication/5f255b6d-f71c-5afc-bafb-32d
b62630d37
• Public-Private Partnership (PPP) in the Philippines: A Handbook for International Private
Investors
THANKS